Netflix Shares Soar As Profit Quadruples

Reuters

The Netflix company logo is seen at Netflix headquarters in Los Gatos, CA on Wednesday, April 13, 2011. AFP PHOTO / Ryan Anson (Photo credit should read Ryan Anson/AFP/Getty Images)

LOS ANGELES, Oct 21 (Reuters) - Subscription video company Netflix Inc added 1.3 million customers to its U.S. streaming business during the quarter that ended in September, helping to boost earnings past analyst expectations to 52 cents per share.

Shares of Netflix, one of the year's biggest gainers, jumped 10.6 percent in after-hours trading on the Nasdaq. Analysts on average had expected the company to report earnings of 49 cents per share, according to Thomson Reuters I/B/E/S.

Net income for the quarter reached $32 million, up from $8 million a year earlier, Netflix said on Monday in its quarterly letter to shareholders.

Total subscribers to the U.S. streaming service, the biggest part of its business, reached 31.1 million. Netflix added 1.4 million customers in international markets, bringing its reach in foreign territories to 9.2 million.

When you finish a show or movie on Netflix, the site requests that you give it between one and five stars, based on how much you enjoyed it. You're not being asked to rate that content for kicks, or so that you can later reminisce about how much you liked a certain film: Rather, Netflix has spent many years improving its recommendation engine, even offering a $1 million prize for anyone who could up the accuracy of Netflix recommendations by 10 percent.
At this point, the Netflix recommendation engine is pretty darn accurate -- it takes into account your own ratings as well as the viewing habits of those similar to you. Basically, the more films you rate, the more you're likely to enjoy a Netflix recommendation. If you constantly find yourself frustrated that there's nothing on Netflix, take a half hour or so and knock out a few hundred ratings on the "Taste Profile" section of the site, and make sure you've filled in your genre preferences, too.
Finally, if Netflix persists in recommending a title that you're just never going to watch -- for me, that would be "The Lincoln Lawyer" -- remember that you can click on the "Not Interested" button on any film's homepage and it will disappear from your recommendations page while simultaneously smartening up your future recs.
(For an in-depth look at the Netflix recommendation engine, and how it works, I recommend this post on Netflix's official blog.)